There are many things you need to ask yourself whenever you consider insurance in Singapore. Often, people ask many questions before they purchase their insurance policies as they may not fully understand the policies or are unsure on how it willfit in their overall financial plans.
Sometimes, people also ask questions because they are in a state of worry – wondering if they can really trust the agent. Sometimes, they even do it for the sake of asking, either to sound like they’re knowledgeable, or to show that they are interested in what is being discussed. They may even asked questions after being pressed by agents who are trying to close a deal and want to address any final concern that they may have.
Whatever the case, this habit of asking questions should not stop just because you have bought a policy.
Once you’ve bought a policy, you do not suddenly become a product expert overnight. Neither are all your insurance needs finally settled.
Your life is always changing and this may or may not impact your insurance requirements. Significant events in your life, including getting married, having a child or even changing jobs will impact the types of insurance you should be adding to your personal coverage.
With this in mind, here are three questions you should always ask your agent even after you’ve bought your insurance policies.
# 1 Are There Any Gaps In My Insurance Coverage?
Taking this question to your insurance agent might sound like an invitation for them to sell you more policies. However this is still an important question that you need to ask.
Of course, if you find the agent trying to push products that you are sceptical of or introducing new products as soon as you decide that one is not suitable, he or she may have taken the question as an open season to hardsell you more policies.
Firstly, what you have to do is to think for yourself. You should know how your life is changing and which areas may require more attention. At the same time, you should have a feasible budget that will not put a dent in your family’s daily spending requirements or other financial planning strategy that you have in place.
Life events such as getting married, purchasing a home, having a baby or, unfortunately, contracting a disease are good reasons to ask your agent this question. What you may not factor in is that life events such as navigating a new career path, pursuing a new hobby or even adopting a pet can change your insurance needs and requirements.
Take these types of questions to your agent only after you have pondered over it yourself and are ready to listen to professional advice. If you do not even start the process by asking yourself this question, no matter what your insurance agent says, you will have no idea whether it’s sounds right or not.
Listening to what your agent says makes a lot of sense as you would never know the details and fine print of the policies you are intending to buy without their explanation. Your policies may include exclusions for certain risky jobs or hobbies. Similarly, you could require additional policies once you are less healthy or contract a disease.
# 2 Do I Really Need All These Policies?
This is the flipside of the first question. While it’s a good practice to constantly find gaps in your needs and purchase policies to cover for it, you have to consider that as certain needs arise, others diminish. What you bought in the past may not be as relevant today or what you even need in the first place.
It may also be unsustainable to continuously buy new policies while not eliminating old ones that are no longer required.
A change in career might mean you no longer require annual travel insurance. Downgrading your home may mean reducing home content insurance. Learning how to invest on your own may mean you prefer channeling funds to your own self-designed investment plan, rather than to continue on the investment-linked insurance policy which you have bought in the past when you were less investment savvy.
You could also ask yourself if you really require certain insurance policies such as a full private hospitalisation coverage in addition to Medishield Life, when you could do with lower coverage and lower your premium payments each year.
Have your full insurance coverage in mind (and hand) when you approach your agent for this so that you can truly evaluate your requirements.
At the end of the day, as much as we would like to cover every possible gap or risk in our lives, this comes at a cost and we need to weigh the benefits against the price we have to pay for these coverage.
# 3 What Should I Do To Lower My Risk, And Possibly Reduce The Cost of Coverage?
This may very soon translate into actual savings or delay in incremental costs on your insurance premiums. As recently announced, this may soon make an impact on your premiums, with Prudential leading the way to tie rider renewals to a person’s claims. This mean the more often you are sick or utilise healthcare services, the more you will be charged for your insurance.
Such a concept has already been put in place for car insurance for a long while, with those who do not claim against their policy enjoying premium rebates in the form of No Claim Discount (NCD).
AIA also has its AIA Vitality programme which provides members rewards and/or premium discounts to lead healthy lifestyles. Many insurance companies also reduce insurance premium significantly for non-smokers so you can enjoy a lower premium if you no longer smoke.
This question requires you to critically think on aspects you are overlooking that can lower your health or safety risk – be it driving or health services. This could be in the form of going for regular screenings, eating healthily, kicking bad habits or even being more active.
What this really means is that you are taking charge of your health rather than thinking of it as something that is “covered” for in the event anything bad happens. This mentality usually results in more reckless behaviour which may lead to health and safety issues for people.
As more people make claims, because they were not trying to reduce their risks in the first place, this will mean incremental costs for the whole industry. The likely response from the insurance industry would be to better differentiate between lower risk and higher risk policyholders.
Don’t Forget To Continue With Your Annual Review
Even though you’ve already spoken to your agent during the year, it does not mean you should forego your annual review of your policies with him or her.
There are important questions you should still ask, and questions pertaining to your new policies you should get familiarised with.
What are some other questions that you should be asking your insurance agent after you have bought a policy? Discuss your views with us on the open Facebook SG Insurance Discussion Group.
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